What’s The Big Idea?
What’s theBig Idea?Why most innovations fail to scale and whatto do about it
2What’s the Big Idea? Why most innovations fail to scale and what to do about it
“What happens when the project succeeds, and the new product or service is launched? If a newidea is to have impact – commercially or socially – then it needs to move to scale. People have toadopt it in large numbers, the ideas need to spread, and the concepts diffuse. And it’s here, onthe journey to scale, that we find a number of roadblocks, potholes, and other obstacles to longterm innovation success.”Dr. John BessantProfessor and chair in innovation and entrepreneurship at the University of Exeter1IntroductionIn a disrupted, fast-changing world, organizations are bettingbig on innovation: With startups powering many innovations – includingtechnology innovations – around 295 billion was investedin nearly 32,800 venture capital deals worldwide in 2019.This is more than any prior year and a significant increasefrom 2010’s 48 billion.2 Innovators around the globe filed 3.3 million patentapplications in 2018, up 5% from the previous year, and acontinuation of nine straight years of increases.3 The pandemic has also reinforced the need for innovationand renewal. In our recent research into the post-COVIDnew normal, 68% of executives say that they have alreadyaccelerated or will accelerate existing transformationinitiatives.4Organizations clearly understand the criticality of innovationto meeting new customer needs, driving new levels ofoperational performance, and building long-term value andgrowth. However, these ambitions tend to run into a majorobstacle: the difficulty of achieving scale with innovationsin processes, products, or services. In many of our researchsurveys, achieving scale5 is often cited as the number onebarrier to realizing commercial goals. And, this challengeis not specific to one sector or one technology. As Figure1 shows, the organizations that have achieved scale inareas such as smart factories, artificial intelligence, agile, orautomation tend to be a small minority.3
Figure 1. Organizations are challenged with low rates of scaled implementation across technologies and sectorsAutomotiveSmart Factories10%ArtificialIntelligence13%Percentage of automotivesmart factories that have masteredthe core areas of smart factories tobe ready to drive them to scalePercentage of organizations acrosssectors that have successfullydeployed AI use cases in productionand continue to scale morethroughout multiple business teamsAgile 20%Retail StoreAutomation21%Percentage of organizations acrosssectors that have achieved a highlevel of competency with agilepractices across the organizationPercentage of stores that retailers,on average, have implementedautomation use cases in todaySource: Capgemini Research Institute, “How automotive organizations can maximize the smart factory potential,” February2020; “Smart stores: Rebooting the retail store through in-store automation,” January 2020; “Agile at scale: Four ways to gainenterprise-wide agility,” November 2019; “The AI-powered enterprise: Unlocking the potential of AI at scale,” June 2020.Organizations invest millions in in-house R&D, set updedicated customer-centric innovation centers, and forgepartnerships with external organizations to ideate and bringto life proofs of concept and prototypes. However, as wediscuss in this report, not many organizations today makeachieving scale a part of their strategic plan. They are adeptat generating new innovations and incubating them, butmany struggle to actually transition them to projects at scale.That is largely because scaling is just hard to do and is nottaught, as John Bessant – professor and chair in innovationand entrepreneurship at Exeter University – believes. “It's4quite hard to scale innovation,” he says. “Scaling is all aboutother people – trying to put yourself in their shoes, understandinghow they might perceive the innovation, how they might perceivethe innovator. These areas are much harder to shift and they arenot amenable to a simple sales push – instead, they require subtlemarketing. Also, we don’t teach scaling enough. Within businessschools, what we teach about innovation is very front-endloaded. There is not even much academic literature written aboutscaling innovation compared to generating innovation.”This means many organizations are not winning big fromtheir big innovation bets. The impact and value of innovationWhat’s the Big Idea? Why most innovations fail to scale and what to do about it
is only fully realized through scaling and adoption not fromideation or experimentation. Companies that scale andadopt innovation with speed create the desired businessimpact, achieve accelerated business performance, and gainsustained competitive advantage. For example, ColgatePalmolive has implemented scaled AI-based innovation toleverage its database of over 80,000 oral care formulas,combined with the recent market trends, to drasticallyreduce the time to develop and market a new formulation.Using predictive analytics, the company reduced the numberof experimental recipes from 896 to 23 and cut time tomarket a new toothpaste from several years to six months.This has helped Colgate-Palmolive achieve major cost savingsand gain competitive advantage in a crowded market.6To understand what works when scaling innovation, weconducted in-depth interviews with over 40 executivesfrom multinational organizations around the world thathave achieved scale. We also spoke to eminent academicsacross the world who focus on innovation in their researchand teaching. Executives we spoke to came from varioussectors, including automotive, banking, insurance, consumerproducts, insurance, manufacturing, life sciences, retail,technology, telecom, and utilities. Together, they representcombined revenues of over 1.7 trillion. Most executiveswe interviewed work within the innovation function, eitherwithin innovation centers or labs or within innovationfocused roles within business units. A small share ofexecutives sit within the organization’s venture or internalstartup business.In this report, we draw on the insights shared by theinterviewed executives and academics, research oninnovation best practices, and our own experience workingwith a range of clients in scaling innovation.We offer three recommendations for successfully scalinginnovation (see Figure 2):1.Treat scaling as its own discipline within theinnovation journey.2. Design innovation governance to include scaling as akey responsibility.3. Build a culture that is willing to take tough decisions onscaled innovations.Figure 2. Three actions points for how organizations can successfully scale innovationTreat scaling as its own discipline within the innovation journeyDesign innovation governance to include scaling as a key responsibilityBuild a culture that is willing to take tough decisions on scaled innovationsSource: Capgemini Research Institute and Capgemini Technology, Innovation and Ventures analysis.5
Treat scaling as itsown discipline withinthe innovation journeyInnovating – and successfully scaling innovation – aretwo different ballgames. They often require a differentset of skills and practices. However, very few companiesexplicitly differentiate between the front end of generatinginnovation and the back end of scaling innovation. Theydo not think of scaling in its own right – a discipline that isquite distinct in its purpose, requirements, and challenges.Although scaling occurs downstream in the innovationjourney, its consideration – and assessment and planning– need to begin much earlier in the process. If ideas andexperiments are not informed and challenged by adoptionand scaling requirements, they run the risk of misplaced timeand investment.Scaling should be treated as its own discipline within theinnovation journey because it is different from innovationgeneration: It has its own set of challenges. Because scaling sits withinthe business or product teams that deliver, versus thelabs or innovation centers where ideas are generatedand tested, it is more susceptible to changing marketconditions or shifts in consumer demand. For example,teams responsible for scaling globally must alsoconsider how to adapt the innovation to meet local orregional needs. It requires a different mindset, knowledge base, and set ofskills. The mindset and priority skills required for ideationand incubation are different from those required forscaling. For example, emotional intelligence, empathy, andbeing motivated by thinking abstractly are more importantfor ideation, while facilitation, collaboration, and beingmotivated by taking action are critical for scaling. It requires a different pace and timing. For example, manyinnovations, particularly transformative, require a longertime horizon for generation and a quicker speed toimplement to react to changing market conditions andconsumer demand.A common scaling challenge is that organizations lack teamswithin the business that can operate and run an innovationbeyond proof of concept. To address this challenge – andthe unique needs of generating and scaling innovation – oneretailer split its innovation lab into two distinct teams. On theone hand, it has a team that focuses on high-impact, “bluesky” concepts and projects and reports directly to the CEO.On the other, it has an in-store team that focuses on scalingand running in-store innovations and which reports to thehead of retail stores.7To recognize these distinct requirements and treat scaling asits own discipline within the innovation journey, organizationscan draw on the following recommendations (see Figure 3): Set up specialized roles dedicated to scaling withinthe business to ease and accelerate wider businessadoption. Traditionally, most innovation teams compriseemployees that are laser-focused on generatinginnovation. By working closely with startups, academics,and the wider innovation community, most of them havedeveloped strong capabilities in the generation part ofthe innovation journey, which includes both ideation and6What’s the Big Idea? Why most innovations fail to scale and what to do about it
Figure 3. Four recommendations for organizations to treat scaling as its own discipline within the innovation journey1Set up specialized rolesdedicated to scalingwithin the business toease and acceleratewider business adoption2Cross-train teamsacross scaling andgenerating functions3Place innovationgenerators into thescaling function tobuild awareness offuture challenges4Make viability andfeasibility analysesintegral aspects of theinnovation journeySource: Capgemini Research Institute and Capgemini Technology, Innovation and Ventures analysis.incubation. However, when it comes to scaling those brightideas, an intermediate scaling function – one that sitsseparately from the idea generation unit and is housedwithin the business function – is a huge help. To maintain afocus on scaling, specialized resources should be allocatedto own scaling responsibilities within the businessfunction. Although specialized in scaling, this scaling teamworks collaboratively with innovation-generators andthe business to prepare the ground for scaling selectedinnovations. When an innovation is adequately incubated,they scale it to a certain point before transferring it tothe operations team within the business function. Somecompanies have already started experimenting with thisapproach, even if they do not explicitly differentiate thesefunctions. An innovation executive at a global provider offinancial market data and infrastructure told us: “We haveinnovation-generating teams in various locations that areself-contained and cross-functional. They sometimes look toengage with clients directly or with other parts of the businessto develop iterative functional prototypes, and sometimescollaborate with the business or product teams who take theseideas to scale. Since scaling involves many stakeholders acrossthe business – including strategy and sales in the commercialdomain, legal, marketing, data operations, technology, andother support teams – you sometimes have to completelyseparate scaling from generating and business functions inorder to reduce complexity.”It is important that companies clearly distinguish theobjectives of the generating function the specializedscaling teams, and the business function. The generatingfunction ideates and incubates innovation, while thescaling team scales it rapidly within new or existingmarkets, and the business function operationalizesthe innovation and drives longer-term growth. A cleardefinition of objectives and responsibilities – and evenseparate resources with their own budget – allowsinnovations to be handed over from one function tothe other when the time is right. Any challenge due tooverlapping responsibilities will be alleviated and eachfunction will have a clear understanding of its specific rolein the innovation journey. This will ease and acceleratewider business adoption as well as place teams in theright places and ensure accountability for each stage ofthe journey. Cross-train teams across scaling and generatingfunctions. An aptitude for innovation requires distinctcognitive and behavioral skills, and there are skillsthat are required of both generating and scalingfunctions. The soft skills and attributes that are equallyimportant to both groups include openness, persistence,persuasiveness, conflict resolution, teamwork, curiosity,and communication, among others.8Although the important innovation skills such ascommunication, strategic thinking, leadership, andcreative problem-solving are fairly similar through theinnovation journey, there are differences in the technicaland operational skills required across functions.9 Scalingand growing innovation require leaders and employeeswho are more “implementers” than “conceptualizers,”who are entrepreneurial and business builders, and whoanchor their approach on market demand and customerneeds. The head of an innovation lab at an Americanhealthcare company believes there are certain skills thatare specific to different parts of the innovation processand acknowledges there is a need to cross-train teamsacross ideation, incubating, and scaling, so that effectivecollaboration is fostered and each function understandsthe thought process behind the actions of the other. Thiswill ensure each function helps one another achieve theirgoals, including scaling and adoption. She believes the7
skills and behaviors that are critical for each innovationteam member to have include:– For generating: a high level of emotional intelligence,empathy, an understanding of behavioral science, andhaving a business case mindset that understands howthe innovation will appeal to both the customer and themarket– For scaling: having an operator mindset, being effectiveat working cross functionally and with partners, and alsounderstanding technical requirements.10 Place innovation generators into the scaling functionto build awareness of future challenges. By temporarilyassigning employees tasked with innovation generationto the scaling function, organizations can ensure that theyunderstand the challenges of scaling. Both scaling andgenerating teams should also be involved in designingeach team’s key milestones and understand the activitiesrequired to achieve those milestones. Given scaling is oftennot a linear process, placing innovation generators intothe scaling function allows both teams to "test-and-learn"in which proofs of concept and prototypes are seamlesslymoved back and forth in order to iterate, pivot, orintroduce tweaks and changes that will enhance scalability.Exeter University’s John Bessant emphasizes the needto acknowledge the different skill sets and to also movepeople around temporarily. “Companies need to find ways tobridge the innate resistance stemming from the gap betweenthe teams doing exciting stuff in the lab and the ‘rest of us,” heexplains. “One of the best ways is to move people around. Forexample, second people into the front-end innovation team, orplant innovators inside the product or business lines to explorethe scaling question when a pilot or prototype is ready.”For Philip Clayson, a chief information officer who led thetransformation of the IT function at SSE Energy Services –a unit that was divested to fellow British energy companyOvo Energy last year11 – exposing employees to both ideageneration and scaling is critical. “We work on innovationwith dedicated teams and these teams rotate across ideation8and scaling roles,” he says. “We focus recruitment on talentwho are going to push the envelope when it comes to ideatingand scaling innovation and are also passionate and technicallycapable. The same sets of employees rotate through ourinnovation process.” Make viability and feasibility analyses integral aspectsof the innovation journey. Innovation generation tendsto focus on what is desirable, beginning with trying tosolve an unmet or unstated customer need. It rarelyfocuses on the two aspects that are more relevant for alarge-scale business – viability and feasibility. Feasibilitygauges if an innovation is technologically and functionallypossible for a business to execute, while viability assesseswhether or not a sustainable business can be built out ofthe innovation.12 As echoed by our interviewees, the visionof scaling needs to be introduced at the beginning of theinnovation journey, through close collaboration betweenthe generating and scaling functions. By treating scalinginnovation as a separate discipline, organizations canensure that they bring in teams or individuals that are morefocused on the viability and feasibility of innovation rightfrom the start of the ideation phase. Choosing appropriatescaling metrics – such as revenue generation, cost savings,efficiency improvement, net promoter score, amongothers – to measure success of scaling is key towardsunderstanding feasibility and viability. Hence, by ensuringeach innovation is tied to a scaling vision right from thestart, organizations can ensure that their innovations donot fall in the desirability versus viability-feasibility chasm.13Importantly, the generating and scaling functions shouldfind the right balance of the three aspects so that an earlyfocus on feasibility and viability does not stifle innovationgeneration.Design thinking – an iterative approach to solving problemsthat puts the user at the heart of product or servicedesign14 – can bring desirability, viability, and feasibilityinto alignment.15 Lululemon – the active-wear company –combines design thinking and science (including a “sensoryimmersion lab”) to measure a customer’s unique patternof movement when developing gym and other activewear. Its Whitespace innovation lab in Vancouver thenuses advanced technology to develop feasible, innovativeproducts while ensuring the idea is underpinned by a viablebusiness model.16What’s the Big Idea? Why most innovations fail to scale and what to do about it
Innovation in Action at Nokia Bell Labs:An interview with Domhnaill Hernon, vicepresident of innovation and creativityThe Capgemini Research Institute spoke with Domhnaill Hernon, vicepresident of innovation and creativity at Nokia Bell Labs, the industrialresearch arm of Nokia, the Finnish telecommunications company, toexplore how the team at Bell Labs helps drive innovationsto scale.Q: How do you ensure Nokia Bell Labs is helping to drivesuccess at scale?Q: How do you de-risk innovation to ensure itscales successfully? ?"As the research arm of Nokia, we’re not responsiblefor revenue generation. Instead, it’s about creatingsuccessful proofs of concept and prototypes and trialingthem with customers in the field in a real-life scenario.Revenue generation falls under the responsibility of theproduct lines – we are responsible for giving them theassets and technology and then they
innovation best practices, and our own experience working with a range of clients in scaling innovation. We offer three recommendations for successfully scaling innovation (see Figure 2): 1. Treat scaling as its own discipline within the innovation journey. 2. Design innovation governance to include scaling as a key responsibility. 3.
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